EXPLANATORY STATEMENT
ISSUED BY THE MINISTER FOR FINANCE AND DEREGULATION
SUPERANNUATION (PRODUCTIVITY BENEFIT) ACT 1988
DECLARATION UNDER SUBSECTION 3F(2)
Superannuation (Productivity Benefit)
(Qualified Employees Exclusion) Declaration 2012
The Superannuation (Productivity Benefit) Act 1988 (the PB Act) provides superannuation arrangements, based on the minimum employer superannuation requirements under the Superannuation Guarantee (SG), for certain Australian Government employees, office holders and contractors.
2. The Judges’ Pensions Act 1968 (JP Act) provides for the payment of a lump sum in limited circumstances, that is, where a judge:
(a) dies without leaving an eligible spouse or children at the time of their death;
(b) dies leaving an eligible spouse or children where the reversionary pension to that spouse or children ceases to be payable before it equals the minimum payment required under the SG; and
(c) is not eligible for a pension on ceasing their service as judge.
3. Under the JP Act a lump sum benefit for a judge who commenced service before 1 July 2006 is calculated under the PB Act, rather than the SG arrangements in the JP Act.
(a) The PB Act is a legacy superannuation arrangement, which was closed to new members on 1 July 2006.
(b) At the time of closure of the PB Act in 2006, the SG lump sum arrangements, together with a special appropriation to cover these payments, were inserted into the JP Act to apply going forward. However, an appropriate legislative change was not made to make sure that all superannuation lump sums that became payable would be covered under the JP Act and the special appropriation for that purpose.
4. The Government proposes to correct this situation by making minor amendments to the JP Act at the next available opportunity.
5. Under the proposed amendments, all judges, including those appointed before 1 July 2006, would be covered by the JP Act in respect of any lump sum benefit that becomes payable, thus securing the payment of all judges’ benefits under the appropriation in the JP Act in future.
6. This declaration, made under subsection 3F(2) of the PB Act and cited as the Superannuation (Productivity Benefit) (Qualified Employees Exclusion) Declaration 2012, is being made as an interim measure that is consistent with the proposed permanent solution.
7. The effect of this declaration is to cease operation of the PB Act in respect of any affected judge, such as the recently deceased judge mentioned above, who:
(a) would otherwise have been covered by the PB Act due to having pre-1 July 2006 service; and
(b) where the benefit payable under the JP Act is not less than the benefit that would have been payable under the PB Act.
8. The Declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LI Act).
9. The Attorney-General’s Department and the Australian Government Solicitor (AGS) were consulted in relation to the Declaration.
10. The Declaration commences on 1 July 2012. The AGS has confirmed that the Minister has the legal authority to make the declaration, including the commencement date. No judge can be disadvantaged by the declaration as it only applies where the benefit payable under the JP Act is not less than the benefit that would have been payable under the PB Act.
11. A Statement of Compatibility with Human Rights is at Attachment A.
ATTACHMENT A
Overview
The Superannuation (Productivity Benefit) (Qualified Employees Exclusion) Declaration 2012 was enacted to address a legislative gap that left certain judges who commenced service before 1 July 2006 uncovered under the Judges’ Pensions Act 1968 for superannuation lump sum benefits. The Superannuation (Productivity Benefit) Act 1988, which provided these benefits, had been closed to new members as of 1 July 2006, but an appropriate legislative change had not been made to ensure all lump sum benefits for affected judges were covered under the Judges’ Pensions Act 1968. The Declaration, made under subsection 3F(2) of the Superannuation (Productivity Benefit) Act 1988, was introduced as an interim measure by the Minister for Finance and Deregulation to cease the operation of the Act for affected judges, ensuring they receive benefits that are at least equivalent to what they would have received under the superseded Act. This Declaration ensures that no judge is disadvantaged and is consistent with the proposed permanent legislative solution to be implemented in the future.
Scope and Application
The Superannuation (Productivity Benefit) (Qualified Employees Exclusion) Declaration 2012 applies to certain Australian Government employees, office holders, and contractors who would otherwise be covered by the Superannuation (Productivity Benefit) Act 1988, particularly those with service prior to 1 July 2006. This legislative instrument is designed to align the superannuation arrangements for affected judges with the Judges’ Pensions Act 1968, ensuring that the lump sum benefit payable under the Judges’ Pensions Act is not less than what would have been payable under the Superannuation (Productivity Benefit) Act. The declaration effectively ceases the operation of the Superannuation (Productivity Benefit) Act for these affected judges, thereby securing their benefits under the appropriation in the Judges’ Pensions Act. This measure serves as an interim solution while permanent legislative changes are being made to the Judges’ Pensions Act.
Key Provisions
The main operative sections of the Superannuation (Productivity Benefit) (Qualified Employees Exclusion) Declaration 2012 (the Declaration) involve the cessation of the operation of the Superannuation (Productivity Benefit) Act 1988 (PB Act) in respect of certain judges. Section 7 of the Declaration outlines that it applies to any judge who would otherwise have been covered by the PB Act due to service prior to 1 July 2006 and where the lump sum benefit payable under the Judges’ Pensions Act 1968 (JP Act) is not less than the benefit that would have been payable under the PB Act. This ensures that all judges, regardless of their service commencement date, are covered by the JP Act for any lump sum benefits that become payable.
The obligations imposed by the Declaration on the parties it governs are primarily concerned with the transition of superannuation arrangements for certain Australian Government employees, office holders, and contractors. Specifically, it mandates that any affected judge who would have been covered by the PB Act is now covered by the JP Act, provided that the benefit under the JP Act is not less than what would have been payable under the PB Act. This transitional measure aims to ensure that all superannuation lump sums for judges are appropriately covered and paid under the JP Act and its special appropriation, thereby preventing any disadvantage to the judges due to the legislative changes.
There are no explicit offences, penalties, or civil/criminal consequences for breach stated in the Declaration itself. Instead, the Declaration is intended to be an interim measure that aligns with the proposed permanent legislative solution outlined in the explanatory statement. The Declaration is designed to ensure that no judge is disadvantaged by the changes, as it only applies where the benefit payable under the JP Act is not less than the benefit that would have been payable under the PB Act. Therefore, the primary focus is on ensuring a smooth transition in superannuation arrangements without causing any negative impacts on the affected judges. The legislative instrument operates within the framework of the Legislative Instruments Act 2003, and the Australian Government Solicitor has confirmed the Minister’s legal authority to make the declaration, including its commencement date.